Kieran O'Donnell (Limerick East, Fine Gael)
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Question 93: To ask the Minister for Finance if the special group on public service numbers and expenditure programmes report is the basis of the spending savings which he intends to achieve in 2009; and the instruments that have been developed in the human resource area to implement these proposals. [38093/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The basis of the expenditure savings for 2009 was set out in my budget of 14 October 2008 and supplementary budget of 7 April 2009. A range of instruments has been developed in the human resource area to contribute to the implementation of these savings, notably the incentivised scheme of early retirement in the public service, ISER, the special Civil Service career break scheme, ICB, and the shorter working year scheme, together with the moratorium on the filling of public sector vacancies by recruitment or promotion. Details of these schemes were announced in the context of the supplementary budget in April last. In addition, and as signalled in the April budget, an adjustment of approximately €4 billion is required for next year to meet the Government's fiscal consolidation targets.

Given this context, the Government must consider all expenditure areas. In this regard, one must bear in mind that approximately one third of gross current expenditure is on social welfare, approximately one third on the public service pay bill and one third of all the remaining expenditures are on the programmes, including the capital programmes. The Departments of Social and Family Affairs, Health and Children and Education and Science, collectively, make up approximately 80% of current expenditure. It is not feasible that an adjustment of the scale envisaged can be made without significant contributions from these various areas.

Naturally, this will involve difficult decisions for the Government in the lead up to budget 2010. In this overall context, the report of the special group on public service numbers and expenditure programmes will be taken into consideration. As regards the human resources implications of the forthcoming expenditure savings, discussions are ongoing with the social partners on the achievement of the required savings, including savings of €1.3 billion in 2010 from the public sector payroll. While the task ahead is challenging, it is one the Government is determined to see through in the best interests of the country.

Kieran O'Donnell (Limerick East, Fine Gael)
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Are the line Ministers taking into account the McCarthy report in terms of their budget savings and have they reported back to the Minister for Finance on that matter?

Could the Minister indicate how many public servants have taken up the various schemes to which he referred - the career break option, the shorter working week and the early retirement scheme? What staff reduction costs does he envisage in the forthcoming budget? For the 2010 budget, the McCarthy report made recommendations of reductions of €5 billion? How much of the McCarthy report recommendations in terms of value does the Minister expect will form part of budget cost savings in 2010 budget?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I cannot give a precise estimation at this stage. However, the procedure adopted on the McCarthy report has been that it was circulated to each Department and it is being examined, Department by Department, in the context of the Estimates process. Each Department is being interrogated on the report's recommendations and on what contribution it can make to savings within public expenditure. At the conclusion of that process of interrogation, there is then a political decision-making exercise by the Government on any recommendations.

It is important to bear in mind that the McCarthy report did not preclude the Government from looking at other areas. It is worth noting that, for example, the report did not have any mandate to evaluate capital projects except where there were current expenditure implications. Equally, the McCarthy report did not deal with the question of pay and remuneration in general. It is true that some of the savings referred to in the report are payroll savings in that it examined certain special allowances and premium payments, for example, in the health and justice sectors. However, the report did not deal with pay as a general subject and it is now under discussion with the social partners.

The non-pay recommendations of the McCarthy report related primarily to social welfare and other programmes and they are under examination by the Government in the context of the Estimates process.

Kieran O'Donnell (Limerick East, Fine Gael)
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I asked how many civil servants have availed of the schemes.

In terms of the forthcoming budget, how much of the €4 billion does the Minister expect will be contributed by cost savings as distinct from taxation increases? That is critical, and he has spoken at length about looking at the matter. However, the Minister cannot tax his way out of a recession and he must look at it in that context. He has not answered the question. In the context of the McCarthy report, he should give us a firm figure. How much of the €4 billion that he needs to find in the forthcoming budget will comprise cost savings?

Pádraic McCormack (Galway West, Fine Gael)
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50:50.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The incentivised early retirement scheme was open from 1 May but, following various extensions, it closed on 23 October. I do not have an up-to-date figure for the Deputy this afternoon.

Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister might let us know those figures.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I will arrange for that to be forwarded to the Deputy.

Clearly, the question of the balance of expenditure and taxation is a matter of political decision for the Government and will be announced in the budget. As I made clear time and again, the scope for additional taxation is limited. The bulk of any adjustment in the case of the €4 billion must be located on the expenditure side.

Kieran O'Donnell (Limerick East, Fine Gael)
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How does the Minister define the bulk?